(This post originally appeared on LinkedIn here)
In an earlier post in this series, I spoke about the concept of building flywheels as engines for driving multi-year hyper-growth and why customers prefer them over large upfront investments these days.
For flywheels to keep growing they must drive sustainable win-win for both parties. Flywheels that degenerate into lose-win (where the customer loses) or win-lose (where the vendor loses) will inevitably break and not only stop growing but stop working at all sooner or later.
A growing flywheel is naturally building trust between the involved parties via frequent conversations around maintaining win-win. However, over the lifecycle of a flywheel sellers must be prepared for situations where one party is tempted to challenge the current setup of the flywheel because they don’t perceive it as a win-win anymore or, even worse, where they believe they can exploit a weakness of the other party.
We must categorically decline allowing a party to force changes negatively impacting the win-win design of a flywheel as it will not only affect the current but all future business: Losing a flywheel means losing growth and trust!
As a flywheel grows bigger and more significant, the customer might be tempted to renegotiate deliverables up and prices down. As sellers we cannot simply decline to have this conversation, but we can set its direction: Of course, we will be open to discuss improving SLAs, taking risks away from the customer, applying more demanding quality requirements. And of course, we will be open to reduce incremental unit prices.
But we will only enter into this conversation on a strategic level, talking about the customer’s major initiatives and how we can leverage the flywheel for them to drive non-traditional value. We will not allow the discussion to be a mere cost focused one with procurement.
The same applies for internal demands to renegotiate a flywheel aiming to increase revenues or reducing deliverables on the vendor’s side. Building and growing flywheels takes years, destroying them just weeks. As a seller we not only lose sustainable revenue growth, but also allow trust to be destroyed negatively impacting our chances to build new flywheels for hyper-growth with the customer.
Sellers pursuing a long-term, hyper-growth strategy must not compromise on win-win, whether the push comes from the customer or their own management!
Comments